EXHIBIT 10.15
EMPLOYMENT AGREEMENT
Agreement made as of September 1, 1993, between Cell Pathways, Inc. (the
"Company") with its principal office currently at 0000 Xxxxxxxx, Xxxxxx, Xx.
00000, and Xxxxxxxxxxx X. Xxxxxxxx, who currently resides in Radnor,
Pennsylvania (the "Executive").
Witnesseth
Whereas, the Company desires to induce the Executive to accept the position
as the Company's President upon and subject to the terms herein provided; and
Whereas, Executive desires to accept such employment with the Company upon
and subject to the terms herein provided.
Now, Therefore, in consideration of the premises and the mutual agreements
and undertakings herein set forth, the parties hereto covenant and agree as
follows:
Section 1. Base Compensation and Term. The Company will pay Executive for
his services base compensation at an initial annual rate of One Hundred Fifty
Thousand Dollars ($150,000) payable in accordance with normal Company practice,
but in any event not less often than monthly, subject only to such payroll and
withholding deductions as are required by law. The Board of Directors and
Executive may mutually agree from time to time to change such annual rate of
compensation, taking into account the capitalization of the Company and the
prevailing fair market compensation for industry executives having equivalent
duties and responsibilities in similar situations. The annual rate of base
compensation shall increase by $25,000 upon the completion of the next
significant round of financing (which shall mean at least $5 million from
sources other than present investors). Employment of Executive shall continue
in effect until it is terminated pursuant to Section 8.
Section 2. Bonus Payments. The Executive will be eligible for an annual
cash bonus equal to 25% of base compensation based upon the successful
achievement of certain milestones to be mutually agreed upon by the Executive
and the Company. In addition, the Executive will be eligible for additional
cash or stock bonuses based upon the accomplishment of other significant events
which benefit the Company and result largely from the effort of the Executive.
Section 3. Office and Duties. Executive shall serve as the President of
the Company and shall manage, direct and develop the Company's pharmaceutical
business. Executive shall report to the Chief Executive Officer, and shall
perform and discharge well and faithfully such other duties as may be assigned
to him from time to time by the Company in connection with the conduct of its
business. Executive covenants and agrees that during the term of this agreement
he will devote substantially all of his working time, attention and efforts to
the performance of his duties hereunder and will not engage in competition with
the Company's products until expiration of one year after leaving its employ.
1.
Section 4. Expenses. Executive shall be entitled to reimbursement for
reasonable business and travel expenses incurred by him in connection with the
performance of his duties hereunder upon receipt of vouchers therefor in
accordance with such procedures as the Company has heretofore or may hereafter
establish. As part of Executive's travel expense, the Company shall provide, or
reimburse Executive for, an apartment in Denver, Colorado until such time as the
Company shall determine its permanent headquarters location, it being understood
that this period is expected to end no later than six months after completion of
the next round of funding. If the Company shall fail to determine, or shall
further change, the location of its permanent headquarters, the Company and the
Executive shall enter into such further arrangements as shall be reasonable
under the circumstances.
Section 5. Relocation Expense Reimbursement. Executive shall be entitled
to a reimbursement of all actual costs up to a maximum of Twenty Five Thousand
Dollars ($25,000) for moving, travel, property maintenance, and transaction
costs to relocate the Executive and his immediate family from the Radnor,
Pennsylvania area to the Company's permanent location which may be in Colorado
or elsewhere.
Section 6. Vacation During Employment. Executive shall be entitled to
such reasonable vacation as may be allowed by the Company in accordance with
general practices the Company has heretofore or may hereafter establish, but in
any event not less than four (4) weeks per year.
Section 7. Additional Benefits. To the extent he is otherwise eligible,
Executive and his qualified dependents shall be entitled to participate in all
group insurance programs, health and dental coverage (or reimbursement of
continuation of his present coverage under COBRA or otherwise until the Company
shall establish an indemnity or other non-HMO plan in keeping with the industry
standards), retirement plans, profit sharing plans or other fringe benefit plans
which the Company in its sole and absolute discretion makes available in general
to its employees. The Company will endeavor to obtain life and disability
insurance for all its employees, including Executive, with coverage and on terms
reasonable in light of industry standards.
Section 8. Termination of Employment. Notwithstanding any other provision
of this Agreement:
(a) Death. Executive's employment shall terminate immediately in the
event of Executive's death during the term of his employment, in which event
base salary shall be discontinued and the Board of Directors shall determine
whether Executive has earned any bonus payment described in Section 2.
(b) Disability. The Company may terminate Executive's employment
after having established the Executive's Disability, in which event base salary
shall be discontinued and the Board of Directors shall determine whether
Executive has earned any bonus payment described in Section 2. For purpose of
this Agreement, the term "Disability" shall mean an injury or illness which
prevents the Executive from substantially performing his duties and
responsibilities for a period of sixty (60) days.
2.
(c) Involuntary Termination. The Company may terminate the Executive
at any time during the term of this Agreement. In the event that the employment
of the Executive is terminated by the Company solely pursuant to this Section
8(c), the Company shall continue to pay Executive in accordance with Section 9.
(d) Voluntary Termination. The Executive may voluntarily terminate
his employment at any time, in which event he shall receive no severance pay
other than accrued salary, vacation and any other such compensation, if any,
which is applicable and is generally required to be paid to terminating
employees.
(e) For Good Reason. The Executive may terminate his employment at
any time for Good Reason. "Good Reason" shall mean (i) the assignment to
Executive of any duties materially inconsistent with the duties and substantial
responsibilities of Executive described in Section 3 of this Agreement, or any
other action of the Company which results in a diminution in such position,
authority, duties or responsibilities, or (ii) any material failure by the
Company to comply with any of the provisions of this Agreement.
(f) Cause. The Company may terminate the Executive's employment for
Cause. For purposes of this Agreement, the term "Cause" shall mean (1) an act
or acts of dishonesty or fraud on the Executive's part which is intended to
result in his personal enrichment at the expense of the Company or which
materially xxxxx the Company, (2) a violation of Company policies which results
in material injury to the Company, or (3) a material breach of this Agreement or
any other material agreement between the Executive and the Company. If the
Executive's employment is terminated for Cause, the Company shall pay the
Executive his full base salary through the date of termination and the Company
shall have no further obligations to the Executive under this Agreement other
than in respect of benefit plans.
Section 9. Severance Pay. In the event the Executive is terminated by the
Company solely pursuant to Section 8(c), or if the Executive terminates himself
pursuant to Section 8(e), the Company shall continue to pay the Executive his
full base compensation for a twelve (12) month period from the date of
termination. In addition, the Company will continue to provide the benefits
referred to in Section 7 for a period of twelve (12) months from termination.
Section 10. Proprietary Information and Confidentiality Agreement.
Concurrently with the execution hereof, Executive shall execute and deliver a
Proprietary Information and Confidentiality Agreement in the form of Exhibit A
hereto.
Section 11. Stock Option Grant. Concurrently with the execution hereof,
Executive and the Company shall execute and deliver a Stock Option Agreement in
the form of Exhibit B hereto whereby Executive is granted options to purchase
2177 shares of the Common Stock of the Company of which 25% shall vest and
become exercisable upon the first anniversary of Executives employment, and an
additional 25% at each of the next three anniversary dates of the Executives
employment with the Company; provided that all unvested options shall vest upon
the earlier of (a) change in control as defined in the stock option agreement
and (b) the first regular sales of Company pharmaceutical products for consumer
use in the United States in
3.
commercially significant quantities, whether such sales are effected directly by
the Company or indirectly through a licensee or other intermediary.
Section 12. Amendments. This Agreement may not be amended nor shall any
waiver, change, modification, consent or discharge be effected except by an
instrument in writing executed by or on behalf of the party against whom
enforcement of any waiver, change, modification, consent or discharge is sought.
Section 13. No Conflict. Executive represents and warrants to the Company
that, as of the date hereof, he is not under any obligation to any person, firm
or corporation, and has no other interest, which is inconsistent or in conflict
with this Agreement, or which would prevent, limit or impair, in any way, the
performance by him of any of the covenants or his duties in his said employment.
Section 14. Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Delaware.
Section 15. Approval by the Board of Directors. This Agreement must be
approved by the Board of Directors of the Company prior to its becoming
effective.
In Witness Whereof, the parties have executed or caused to be executed this
Agreement as of the date first above written.
Cell Pathways, Inc.
By: /s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx
Chief Executive Officer
/s/ Xxxxxxxxxxx X. Xxxxxxxx
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Xxxxxxxxxxx X. Xxxxxxxx
Executive
4.
